The Nigerian Retail Scene: The Need for More “Malls” in The Face of E-Commerce

The Nigerian Retail Scene: The Need for More “Malls” in The Face of E-Commerce

The past decade has seen the increasing emergence of large American-styled malls in Nigeria’s populous cities. Investors have been attracted by the promise of Nigeria’s large population, a growing middle-class, and high level of urbanization.[1] Providing an all-in-one convenience centre has changed the shopping culture and experience of shoppers, making the mall-going culture popular in Nigeria.[2] This change may be challenged by e-commerce, but not anytime soon because Nigerians like touch and feel experience that offline retail channels offer.[3]

Nigeria is home to some of the largest shopping malls on the continent, with similar facilities to malls in Europe, the Middle East, and North America. These malls include those owned by foreign investors such as Shoprite, which is one of the most popular in the country and indigenous retailers such as Justrite, Addide, Goodies, Park ‘n’ Shop, Ebeano, Blenco, Bestsavers, Roban Stores, and Everyday Group among others that are changing the shopping experience in Nigeria.

Before the emergence of malls, retail business was mostly carried out from lock-up shops, open markets, small shopping centres, and kiosks. Now, this has metamorphosed over time as developers of shopping malls are leveraging on the increasing population, the changes in consumers’ lifestyles, and advancement in technology to provide experiences for consumers.[4]

Globally, the retail industry is also experiencing some rapid shifts in consumer preferences as it relates to taste, behaviour and expectations, given the rapid pace of technological advances and social transformation. E-commerce is having an increasingly significant impact on brick-and-mortar stores. For example, online retail sales in 2019 was estimated to be 13% of total retail sales globally.

In the US alone, more than 57,000 stores closed between 2007 and 2017 due to changing consumer needs, and more than 5,800 more store closures were announced in 2019.[5] This trend is being referred to as a “retail apocalypse”, and is crippling traditional shopping malls. Major retail stores such as Victoria’s Secret, JCPenney and Gap, have closed numerous locations within the last two years. Some have filed for bankruptcy such as Forever 21 – a judge approved Forever 21 Inc.’s bankruptcy, and an $81 million opening bid for its assets on February 4, 2020.[6] BusinessInsider recently reported that malls across the US are trying to survive the retail apocalypse by investing heavily in rides, indoor ski parks, and other entertainment options to lure in customers no longer interested in just shopping.[7]

In Nigeria, however, different factors ranging from logistical issues to lack of trust are the major factors derailing the growth of e-commerce compared to offline retail channels like malls. In spite of convenience being one of the benefits of e-commerce platforms, Nigerian shoppers still want the ‘touch and feel’ effect before making payment for goods. There is also the instant gratification factor, rather than waiting for days to get your purchase. In Nigeria, a social factor that increases traffic in malls is the opportunity shoppers have to take selfies with friends and families, and post them online for their social media audience as well as admirers. Additionally, people visit physical stores especially malls, just to window shop or as a form of relaxation.

The theory is that the growth of online shopping will reduce the shopping activities taking place in brick-and-mortar stores. But the fact remains that Nigerian shoppers still want to see, feel, and try on products before making a purchase.

What does this mean for Nigerian retailers?

With e-commerce still at its infancy stage in Nigeria, as can be seen by the difficulties being experienced by online retail players such as Konga, Jumia, etc, the good news is that brick-and-mortar is still the winning business model in Nigeria, when it comes to retail. However, the economic situation of the country has greatly diminished the purchasing power of the average buyer.

Between 2014 – 2018, Nigeria’s population grew consistently at a rate of 3%, while the Gross Domestic Product (GDP) has declined at an average rate of -7% over the same period. The resultant effect is that Nigeria’s GDP per capita has been on the decline at a rate of -10%.[8] Operators of businesses in Nigeria need to be efficient in their service/product delivery and effective in their sales due to various reasons ranging from an average economic growth rate of 2%[9] in the last 2 years, a World Bank prediction of a GDP growth rate of 2.1% in 2020, speculations on the possible devaluation of the Naira, and decrease in the country’s foreign reserves.

Nevertheless, to be a winner in the Nigerian retail space, the following must be considered:

Rapid business expansion

Physical evidence is still very relevant in this economy despite the popular chant for e-commerce. However, the siting and configuration of such structures should be different from the norm. The gigantic American-styled malls are no longer effective as they require large land mass, leading to their being sited away from residential clusters, therefore making it inconvenient for the average buyer to access easily.

To win, rapid expansion through purposefully built mini malls is the way to go. This is simply the establishment of mall-like structures in residential areas that are built to purpose with less land mass, but similar offerings. What this does is position the venture as the destination of choice, as a mall’s main advantage is an “all-in-one” experience centre. This approach will lead to sustained patronage levels, as the malls become convenient shopping centres, as opposed to out-of-town sight-seeing destinations.

Customer-centric model

Business as usual doesn’t work anymore. Customers have become more enlightened about product prices and alternatives. Businesses must move from a transactional relationship to establishing an emotional connection with customers. To achieve this, data is key. The mining and analysis of available store data, from purchase behaviours to identifying psychographic patterns will lead to more effective managerial decisions and precision of business initiatives.

High operational efficiency

A major advantage of shopping in malls for consumers is low prices and great deals. However, this doesn’t appear to be the case in majority of our malls, as goods are priced above market prices. The reason for this price difference varies from expensive rent, to taxes and operational inefficiencies. Efficiency can be achieved by reducing waste, wait-time and general administrative hiccups. This modification will create room for more margins, leading to increased profitability after all business obligations are met.

People and culture

It goes without saying that people make organizations. It has become more important for business owners to dictate the culture of their brand and be conscientious in the training of their employees. The employee is the brand people experience before purchasing a product or service.  This is more critical for shop owners and mall administrators, as the culmination of experiences from point of entry, to purchase, and then point of exit is critical, as it determines repeat purchase rate, goodwill, and recommendation.

Global trends are most likely to come home to us in Nigeria. We have seen this happen in multiple industries, at different times. Nevertheless, I reckon that we have at least 10 years before we experience a retail apocalypse, as the foundation of a successful e-commerce industry is built on good infrastructure, which we still significantly lack in Nigeria.


[1] (Quartz Africa, 2017)

Quartz Africa, 2017. Quartz Africa. [Online]
Available at:
[Accessed 2020].

[2][4] (The Nation, 2019)

The Nation, 2019. The Nation. [Online]
Available at:
[Accessed 2020].

[3] (Awosanya, 2018)

Awosanya, Y., 2018. Why brick-and-mortar stores will remain a key channel for eCommerce in Nigeria. [Online]
Available at:
[Accessed 5 March 2020].

[5][7] (BusinessInsider, 2020)

BusinessInsider, 2020. Business Insider. [Online]
Available at: 1.
[Accessed January 2020].

[6] (The Wall Street Journal , 2020)

The Wall Street Journal , 2020. WSJ. [Online]
Available at:
[Accessed 2020].

[8] (Focus-Africa, 2020)

Focus-Africa, 2020. Focus-Africa. [Online]
Available at:
[Accessed February 2020].

[9] (WorldBank, 2019)

WorldBank, 2019. WorldBank. [Online]
Available at:
[Accessed 2020].

Share this post

2 thoughts on “The Nigerian Retail Scene: The Need for More “Malls” in The Face of E-Commerce

  1. “World Bank prediction of a GDP growth rate of 2.1% in 2020”. Is this one still valid, or was done before the virus took over the economy?

    I think the winning formula would be a sophisticated integration of malls and ecommerce platform, depending on whether it’s single or multivendor platforms; but a sizable capital investment is needed, if you must get all the facets spot on.

    Again, operators need to lobby state and local governments to stop building more open markets, because if those markets don’t evolve to become standard malls, they remain a huge distraction to scaling mall and ecommerce businesses here.

    To change a habit or culture, you start by making the default choices unattractive, while projecting the new stuff with lots of incentives and perks; and people will start tilting in that direction.

    Nice piece.


Post Comment